Daily Blog – John E. Johnson, Jr. – March 19, 2008: EUROPEAN DISTRIBUTION OF USA-MADE A/V PRODUCTS HELPS COMPANY BOTTOM LINE IN BAD ECONOMY.

I have asked a number of A/V companies how they are doing now that the US economy is floundering, and the ones that have significant European distribution networks for their products made in the USA invariably have said they are doing fine. One even said they had record sales.

The reason for this is the US Dollar vs. the Euro dollar and British Pound. Right now, the Euro is worth quite a bit more than the US dollar (USD), so that makes it inexpensive for European countries to import US goods, relative to what it used to be. So, US hi-fi products are doing well sales-wise, in Europe. Today (3/19/08), the Euro is valued at about 1.6 USD, and the British Pound is almost at 2 USD. That is a HUGE difference from what the exchange rates were last year.

Even though the economy in Europe is not exactly terrific either, US-made A/V products being sold there because of the value of the Euro and British Pound vs. the USD are taking up the slack. This is very interesting to me, because with the global economy being in some trouble, I would have thought that, at best, sales going down in the USA vs. sales in Europe going up would have evened out, and overall, sales for a US company might just be unchanged, when, in fact, some US companies are actually doing record sales because of Europe.

I guess what this says is that US companies who want to ensure less of an up and down sales chart should definitely consider having global distribution channels for their products, and I don’t just mean being able to ship from the US to Europe. It means having networks of centers overseas that can distribute the products directly from there.

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